How Has Income Inequality Grown?
How Has Income Inequality Grown?
The Reshaping of the Income Distribution in LIS Countries
The chapter looks “behind” standard summary measures of inequality to identify where distributional changes occurred in eight societies over the longest period available in the Luxembourg Income Study Database, focusing on how inequality has grown in these societies (e.g., upgrading, downgrading, polarization). Methods based on the relative distribution are used to decompose overall distributional change into changes in location and shape. This is done for four high-income societies, three transitional societies, and Taiwan. A similar analysis is performed for female-headed households in the United Kingdom and the United States. The goal of this research is to use information on change in the first two moments of the income distribution to explore the degree to which various accounts of rising inequality and middle-class decline are consistent with the actual pattern of distributional change, and to generate new insights into this process.
Keywords: household income inequality, polarization, middle class decline, high-income societies, transitional societies, relative distribution methods, female headed households, Luxembourg Income Study
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